Rising Unemployment Claims Increase Uncertainty

Posted on October 25th, 2022

Unemployment claims have been rising since bottoming in March this year, and have climbed back up, causing concern. By mid-July, initial unemployment claims had bounced back up to 262,000, their highest since last November. While new claims have retreated slightly, unemployment claims continue to remain elevated from their lows. The upward trend in new unemployment claims comes amid growing worry of recession. Meanwhile, new hires are stagnating in many sectors, and some have instituted layoffs, particularly tech and real estate.

With a volatile stock market and a slowing economy, technology companies are easing and even freezing hiring and in some cases conducting layoffs. From an optimistic perspective, layoffs are not at the high levels they were during the pandemic; but in concert with growing unemployment claims, this could foreshadow a much more serious economic slowdown and coming recession.